Quarterly loss for Yahoo its first in nearly 7 years
Yahoo finished 2008 the way it started the year: struggling. But this time, it sank even lower by posting its first quarterly loss in nearly...
Yahoo finished 2008 the way it started the year: struggling. But this time, it sank even lower by posting its first quarterly loss in nearly seven years.
After the market closed Tuesday, Yahoo said it had lost $303 million during the fourth quarter. That compared with a profit of $206 million in the same period a year ago. The Silicon Valley Internet giant said revenue fell 1 percent to $1.81 billion.
It was Yahoo's first money-losing quarter since the first three months of 2002, and the first time its revenue declined since the fourth quarter of 2001.
Despite the loss, Yahoo outperformed Wall Street's lowered expectations. The financial results included one-time charges of more than $500 million to write down international assets and reduce its head count, among other things.
Better than predicted
Excluding those charges, Yahoo earned 17 cents a share, better than the 13 cents predicted by analysts. Revenue excluding commissions paid to advertisers fell 2 percent to $1.38 billion, slightly better than the $1.37 billion expected by Wall Street.
The results closed the books on Yahoo co-founder Jerry Yang's fruitless 18-month stint as chief executive. The company hired a new leader, Carol Bartz, two weeks ago in its latest attempt to orchestrate a turnaround.
Signaling there will be no quick fixes, Bartz told analysts in a Tuesday conference call that she is trying to understand Yahoo's "very complex" organization as she plots a road map for 2009.
Preparing for bumps
Yahoo is bracing for more bumps along the way. In its first-quarter forecast, management predicted the company's revenue may drop by as much as 16 percent from the same time last year.
In a change from the company's past practices, Yahoo refrained from looking beyond March because the economy is so fragile.
Known for her blunt talk, Bartz made it clear she has no intention of selling Yahoo to former suitor Microsoft, but left open the possibility of turning over Yahoo's search operations to Microsoft — an alternative deal that has been bandied about for the past eight months.
"It's my job to make sure we look at anything that makes sense for the company and creates long-term value for shareholders," Bartz said during the one-hour call.
Just a few seconds later, Bartz indicated she would prefer to keep Yahoo intact so she can develop a strategy for mining more profit from its worldwide audience of 500 million users.
"This is not a company that needs to be pulled apart and left for the chickens," she said.
Yahoo's fourth-quarter loss translated into 22 cents per share. It compared with a profit of 15 cents per share in the year-ago period.
The setback wasn't as bad as it appeared because the loss stemmed from charges taken to cover Yahoo's costs for laying off 1,500 employees last month and the diminishing value of its European operations.
Given the long-running deterioration in Yahoo's earnings, investors were bracing for another disappointing performance in the fourth quarter as the dismal economy discouraged spending on Internet ads — the company's main source of revenue.
The pleasant surprise, coupled with Bartz's pledge to shake things up, encouraged investors. Yahoo shares gained 54 cents, or 4.8 percent, in extended trading, after finishing the regular session at $11.34, up 17 cents.
"I'm telling you, there are some really smart people here and they really are motivated to work for a top-notch company," Bartz said. "They just need a little help in their lines of communication and channels and so forth. And the good news is that I happen to be pretty good at that kind of stuff."
Copyright © 2009 The Seattle Times Company
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